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Federal lawmakers have once again brought the government's operating budget to the brink. News4's Melissa Mollet has the update. (Published Tuesday, Jun 19, 2012)

Updated at 12:43 PM EST on Thursday, Dec 15, 2011

UPDATE:

Shifting from confrontation to cooperation, congressional leaders expressed optimism Thursday that agreement was near on extending this year's payroll tax cut, renewing unemployment benefits and averting a federal shutdown.

"We can extend payroll tax relief for American workers and create new jobs and keep the government running and, frankly, we can do it in a bipartisan way," House Speaker John Boehner, R-Ohio, told reporters, a turnabout from weeks of partisan sniping from both sides.

Reid opened the Senate's morning session by saying he and the chamber's top Republican have held talks to resolve remaining disputes. With lawmakers itching to return home before the holidays, Reid said he and Senate Minority Leader Mitch McConnell, R-Ky., hope they can reach a deal ``that would get us out of here in a reasonable time, in the next few days.''

Standing just across the aisle, McConnell agreed with Reid _ a stark contrast to recent days, when the two have fired sharp partisan volleys at each other.

``We're confident, optimistic we'll be able to resolve both on a bipartisan basis,'' said McConnell, referring to one bill that would renew the payroll tax cut and jobless benefits, and a separate spending measure that would keep federal agencies open.

In part, the turnabout reflected the calendar: 160 million Americans would get a sudden tax increase on Jan. 1 if the payroll tax cut was not renewed, and most government agencies would close this Saturday without agreement on spending legislation.

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President Barack Obama says there is no reason for the government to shut down over Congress' struggle on how to extend a payroll tax cut.

He said Congress ``cannot and should not leave for vacation until they've made sure that a tax increase doesn't happen.''

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District Delegate Eleanor Holmes Norton had a message for federal workers last night: watch your spending.

Norton was briefing workers on the possibility of a shutdown this Friday, as the deadline for a year-end funding bill threatens to shut down the government just in time for the holidays.

This is the third time this year thousands of area federal employees and District workers have stared down a furlough because of Capitol Hill gridlock.

On Wednesday the Office of Personnel Management posted a guidance and information sheet on their website to answer concerned employees' questions. OPM says that fed workers would get checks for hours worked prior to a shutdown. But if a deal is not reached and workers are placed on furlough, it would be up to Congress to decide whether or not to cut checks for the lost time.

The Washington Post reports that the budgets for several agencies have already been passed in earlier spending measures, and those workers do not face furlough. A spending bill in November covered budgets for the departments of Agriculture, Commerce, House and Urban Development, Justice, and State. The Post says in addition, Transportation, NASA, and several other smaller agencies have their budgets covered by other spending measures.

Late Wednesday night, Republicans unveiled a massive $1 trillion-plus year-end spending package, which omits some policy provisions sought by conservatives. But the spending package also cuts some Obama-administration measures that Democrats want to hold on to.

The White House had asked congressional Republicans to focus on a smaller, short-term deal to keep government funded and debate the other issues later.

Earlier this week, Republicans passed a spending plan that includes the Obama administration's desired middle class payroll tax break, but also included language that would green-light a contentious oil pipeline from Canada to the Gulf of Mexico. For many Democrats, that addition is a poison pill, and the president vowed to veto any bill that included that language.

Meanwhile, the fate of thousands is in limbo once again. If no agreement is reached by Friday at midnight, the federal government will shut down.